Unite For Youth

Nonprofit Youth Services Business Plan

Financial Plan

Unite for Youth will build funding support from businesses and private donors in the community at an aggressive rate of growth. Yet it will take five years before funding from these sources becomes strong enough to expand the program. The primary expenditures for the program are for the training and managing of mentors and the program activities for youth and mentors. Therefore it is essential that due diligence is applied to fund allocation for these critical program responsibilities. An effective communication system will be established to report fiscal data to the Board of Directors so adjustment can be made quickly to assure the health of the program.

We are also assuming beginning cash reserves on October 1st of $71,500 according to the treasurer.

7.1 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following table. The key underlying assumptions are:

We assume a slow-growth economy, without major recession.

We assume that there are no unforeseen changes in federal grant funding availability.

We assume a continued need for services by at-risk youths.

We assume broad community support for mentoring.

General Assumptions

Year 1

Year 2

Year 3

Plan Month

1

2

3

Current Interest Rate

10.00%

10.00%

10.00%

Long-term Interest Rate

10.00%

10.00%

10.00%

Tax Rate

0.00%

0.00%

0.00%

Other

0

0

0

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7.2 Projected Surplus or Deficit

Unite for Youth's projected surplus or deficit is shown on the following table, with revenue increasing from more than $267,396 the first year to more than $350,000 the third. Surplus may be applied to program activities, marketing activities, or held for contingencies. The detailed monthly projections are included in the appendix.

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7.3 Projected Cash Flow

The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month, and the other the monthly cash balance. The annual cash flow figures are included here and the more important detailed monthly numbers are included in the appendix.

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7.4 Projected Balance Sheet

The balance sheet in the following table shows managed but sufficient growth of net worth, and a sufficiently healthy financial position. The monthly estimates are included in the appendix.

Pro Forma Balance Sheet

Year 1

Year 2

Year 3

Assets

Current Assets

Cash

$112,783

$168,091

$243,979

Other Current Assets

$0

$0

$0

Total Current Assets

$112,783

$168,091

$243,979

Long-term Assets

Long-term Assets

$0

$0

$0

Accumulated Depreciation

$0

$0

$0

Total Long-term Assets

$0

$0

$0

Total Assets

$112,783

$168,091

$243,979

Liabilities and Capital

Year 1

Year 2

Year 3

Current Liabilities

Accounts Payable

$9,087

$10,668

$13,438

Current Borrowing

$0

$0

$0

Other Current Liabilities

$0

$0

$0

Subtotal Current Liabilities

$9,087

$10,668

$13,438

Long-term Liabilities

$0

$0

$0

Total Liabilities

$9,087

$10,668

$13,438

Paid-in Capital

$80,000

$80,000

$80,000

Accumulated Surplus/Deficit

($8,500)

$23,696

$77,422

Surplus/Deficit

$32,196

$53,726

$73,118

Total Capital

$103,696

$157,422

$230,540

Total Liabilities and Capital

$112,783

$168,091

$243,979

Net Worth

$103,696

$157,422

$230,540

7.5 Standard Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 8322 or NAICS 624110, Child and Youth Services, are shown for comparison.

Ratio Analysis

Year 1

Year 2

Year 3

Industry Profile

Funding Growth

0.00%

14.41%

17.35%

7.72%

Percent of Total Assets

Other Current Assets

0.00%

0.00%

0.00%

32.31%

Total Current Assets

100.00%

100.00%

100.00%

56.30%

Long-term Assets

0.00%

0.00%

0.00%

43.70%

Total Assets

100.00%

100.00%

100.00%

100.00%

Current Liabilities

8.06%

6.35%

5.51%

23.57%

Long-term Liabilities

0.00%

0.00%

0.00%

28.65%

Total Liabilities

8.06%

6.35%

5.51%

52.22%

Net Worth

91.94%

93.65%

94.49%

47.78%

Percent of Funding

Funding

100.00%

100.00%

100.00%

100.00%

Gross Surplus

100.00%

100.00%

100.00%

100.00%

Selling, General & Administrative Expenses

94.83%

88.44%

84.75%

78.74%

Advertising Expenses

0.00%

0.00%

0.00%

0.97%

Surplus Before Interest and Taxes

12.04%

17.56%

20.37%

1.90%

Main Ratios

Current

12.41

15.76

18.16

2.18

Quick

12.41

15.76

18.16

1.77

Total Debt to Total Assets

8.06%

6.35%

5.51%

58.63%

Pre-tax Return on Net Worth

31.05%

34.13%

31.72%

3.01%

Pre-tax Return on Assets

28.55%

31.96%

29.97%

7.27%

Additional Ratios

Year 1

Year 2

Year 3

Net Surplus Margin

12.04%

17.56%

20.37%

n.a

Return on Equity

31.05%

34.13%

31.72%

n.a

Activity Ratios

Accounts Payable Turnover

12.41

12.17

12.17

n.a

Payment Days

27

28

27

n.a

Total Asset Turnover

2.37

1.82

1.47

n.a

Debt Ratios

Debt to Net Worth

0.09

0.07

0.06

n.a

Current Liab. to Liab.

1.00

1.00

1.00

n.a

Liquidity Ratios

Net Working Capital

$103,696

$157,422

$230,540

n.a

Interest Coverage

0.00

0.00

0.00

n.a

Additional Ratios

Assets to Funding

0.42

0.55

0.68

n.a

Current Debt/Total Assets

8%

6%

6%

n.a

Acid Test

12.41

15.76

18.16

n.a

Funding/Net Worth

2.58

1.94

1.56

n.a

Dividend Payout

0.00

0.00

0.00

n.a

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